Life settlement/settlement with paid-up policy system and method

ABSTRACT

A method and system for structuring a life settlement with a paid-up policy transaction. An existing insurance policy holder exchanges an existing insurance policy for a paid-up insurance policy or life insurance group certificate purchased by a buyer on a secondary market. The policy holder could also exchange its policy for being named as a beneficiary of a second insurance policy purchased by a buyer on a secondary market.

This application claims the benefit of provisional application Ser. No.60/546,211 filed Feb. 23, 2004, the entire contents of which are herebyincorporated by reference.

FIELD OF THE INVENTION

The invention relates to life insurance transactions, specifically lifesettlement transactions and methods and systems for administering andmanaging those transactions.

BACKGROUND OF THE INVENTION

With the advent of a secondary market for life insurance policies,policy owners have an option in their management of life insurancepolices. Due to various reasons such as retirement, health, changes inestate value, estate taxes or premium costs, the owner of a policy cannow choose to sell the policy on a secondary market instead ofsurrendering the policy to the issuing insurer or allowing the policy tolapse.

FIG. 1 illustrates a typical insurance transaction flow between thepolicy holder 105 and the insurance company 103. An Owner/Holder 105first purchases a life insurance policy, as signified by the arrow 110from an insurer (Insurance Company 103) on the life of an individual.The policy has a designated beneficiary of the owner's choosing. Thepolicy has a certain face value, for example nine million dollars, to bereceived by the policy's beneficiary as a death benefit upon the deathof the individual insured under the policy. The beneficiary may be theOwner 105 or the individual whose life is insured by the policy (notshown), or another person designated by the Owner 105. The person whoselife is insured may be the Owner 105 or another person for whom theOwner 105 has an insurable interest. At step 120 the Owner 105 of thepolicy pays a premium amount, for example five hundred dollars per monthto the insurance company 103, for the policy over a certain period oftime based on various factors such as age and health. As the Owner 105of the policy pays the premium 120, a cash value for the policy mayaccrue if the amount of premium exceeds the policy's cost of theinsurance. This cash value could vary depending upon the type ofinsurance policy, for example, term, whole life or universal lifeinsurance, that is obtained. The policy may be redeemed by the Owner 105for the cash value before the death of the insured. The cash value mayalso provide an additional amount of death benefit.

A life settlement is a sale of an existing life insurance policy by theOwner 105 of the policy to a buyer (Buyer), who is not the issuer of thepolicy. Typically, the purchase price for the policy is less than theface value for the policy, but more than its cash value.

FIG. 1A illustrates a typical a life settlement transaction 100. Thelife settlement transaction is designed to meet the insured's financialneeds. Specifically, as the Owner 105 pays the insurance premium over aspan of for example 30 years, various situations may arise in which theOwner 105 would need immediate access to cash, such as for repayment ofloans, for retirement, for buying a business, for paying for healthcare,or when he otherwise would decide that he did not wish to continuemaking premium payments. Accordingly, in the life settlement transactionat step 130, the Owner 105 would sell the policy to a Buyer 101 for adesignated price, for example three million dollars. At step 140, uponsuch an agreement, the Owner 105 would assign the Policy to the Buyer101, and in exchange, the Buyer 101 pays the Owner 105 in cash. As aconsequence, the Buyer 101 becomes a holder (“Holder”) of the policy. Inaddition, at step 150, the Buyer 101 begins paying the premiums for thePolicy and at step 160 the Insurance Company 103 maintains the Policybut converts its owner to a Buyer 101. As such, the Owner's 105liquidity is increased. Upon the death of the individual whose life isinsured by the Policy, the Buyer 101 receives the face value amount ofthe Policy, nine million dollars.

However, such a transaction will usually have unfavorable taximplications because the cash payment from Buyer 101 to Holder 105 issubject to capital gains and/or income taxes. Accordingly, there is aneed and desire for a life settlement arrangement that allows the Holder105 to sell his policy while reducing tax liability. In addition, such atransaction will leave the Holder 105 with less insurance than he maydesire. Accordingly, there is a need and desire for a life settlementarrangement that allows a Holder 105 to continue to hold an insurancepolicy, albeit with a lower face amount.

Moreover, there is a need in the art for a computer system and acomputerized method that manages and administers life settlementtransactions in order that substantial numbers of settlements can beefficiently implemented and administered.

SUMMARY

The present system and method involves life settlement transactions witha paid-up life insurance policy (SWAPP) that allows a holder to sellhis/her existing life insurance policy on the secondary market whileminimizing tax liability for such a transaction and continuing to havesome level of life insurance.

In a first embodiment, a person purchases a first insurance policy froman insurer. The first policy has a death benefit and names the person asthe beneficiary. Subsequently, the person assigns the first policy to abuyer. The buyer then purchases a second insurance policy from aninsurer and names the person as beneficiary of the second insurancepolicy. The second policy is paid-up and has a death benefit that isless than the death benefit of the first policy. The buyer is made abeneficiary of the first policy and receives the death benefit of thefirst policy upon the death of the individual whose life is insured. Thebuyer may be any individual or other entity.

In a second embodiment, a person purchases a first insurance policy froman insurer, and subsequently assigns the first policy to a buyer. Thebuyer then causes a paid-up second insurance policy to issue to theperson with a death benefit that is less than the first policy. Thebuyer receives the death benefit of the first policy upon the death ofthe individual whose life is insured.

In a third embodiment, a person purchases a first insurance policy froman insurer. In conjunction with the sale, the seller joins a lifeinsurance consumer association or other association having similarattributes and receives a paid-up group life insurance certificate underthe association's group policy it has obtained from a life insurancecarrier for its members. The buyer receives the death benefit of thefirst policy upon the death of the individual whose life is insured.

The invention can be implemented manually or electronically through anetwork of interconnected or accessible computers. The present inventionimplements a method of transacting a life settlement agreementcomprising: receiving an assigned first insurance policy from a policyholder; purchasing a second insurance policy from an insurance company;naming said policy holder as a beneficiary of said second insurancepolicy; and collecting a death benefit of said first insurance policyupon an insured under the assigned first insurance policy beingdeceased. This method further comprises assigning a second insurancepolicy to said policy holder. This method allows the policy holder toname another person as the beneficiary of the second policy.

Further, the present invention implements a method of transacting a lifesettlement agreement comprising: receiving an assigned first insurancepolicy from a policy holder; purchasing a second insurance policy froman insurance company; assigning said second insurance policy to saidpolicy holder; and collecting a death benefit of said first insurancepolicy upon said policy holder being deceased.

The present invention also implements a method of transacting a lifesettlement agreement comprising: receiving an assigned first insurancepolicy from a policy holder, wherein said first insurance policy isplaced in a trust account; purchasing a group insurance policy from aninsurance company on behalf of members of an association owning saidtrust account; assigning a life insurance group certificate to saidpolicy holder; and collecting a death benefit of said first insurancepolicy upon said policy holder being deceased.

The present invention implements a computer based system for transactinga life settlement agreement, said system comprising: a computerprocessor for processing data; a storage means for storing data on andreading data from a storage medium; a computer program, said programimplementing the steps of: managing receipt of an assigned firstinsurance policy from a policy holder; purchasing a second insurancepolicy from an insurance company; naming said policy holder as abeneficiary of said second insurance policy; and managing a collectionof a death benefit of said first insurance policy upon an insured underthe assigned first policy being deceased.

BRIEF DESCRIPTION OF THE DRAWINGS

These and other features and advantages of the invention will be betterunderstood from the following detailed description, which is provided inconnection with the accompanying drawings, in which:

FIG. 1 is a flow chart illustrating a conventional life insurancetransaction;

FIG. 1A is a flow chart illustrating a conventional life settlementtransaction;

FIG. 2 is a flow chart illustrating a first embodiment of a lifesettlement transaction according to the present invention;

FIG. 3 is a flow chart illustrating a second embodiment of a lifesettlement transaction according to the present invention;

FIG. 4 is a flow chart illustrating a third embodiment of a lifesettlement transaction according to the present invention; and

FIG. 5 is a diagram of a processing system implementing the variousembodiments of the invention.

DETAILED DESCRIPTION OF PREFERRED EMBODIMENTS

In the following detailed description, reference is made to theaccompanying drawings, which are a part of the specification, and inwhich is shown by way of illustration various embodiments whereby theinvention may be practiced. These embodiments are described insufficient detail to enable those skilled in the art to make and use theinvention. It is to be understood that other embodiments may be utilizedwithout departing from the spirit and scope of the present invention.

FIG. 2 illustrates a life settlement transaction 200 according to afirst exemplary embodiment of the invention. The life settlementtransaction is based on a life settlement transaction 100 of FIG. 1A;however, the Policy Holder/Owner 205 (“Owner”) does not receive cashupon the assignment of the policy to a Policy Buyer 201 (“Buyer”).Rather, the Owner 205 receives the death benefit under a newly purchasedsecond policy.

The Owner 205 purchases a life insurance policy (Policy 1) from anInsurance Company 203. Subsequently, in step 230, the Owner 205 reachesan agreement with a Buyer 201, and the Owner 205 assigns Policy 1 to theBuyer 201.

In exchange for this assignment, the Buyer 201 at step 240 purchases asecond insurance policy (Policy 2) from a Second Insurance Company 207and then names the Owner 205 at step 235 as the beneficiary of Policy 2.The amount of insurance is calculated by the Buyer using conventionallyknown actuarial information. By way of example, the followingillustration provides details about calculating the correct amount ofinsurance:

Jan. 1, 1990 John Smith Purchases Life Insurance Policy from XYZ LifeInsurance Company as follows: Owner John Smith Insured John SmithBeneficiary Jane Smith Death $9,000,000 Benefit Premiums $20,000/monthfor 30 years Cash $0 Surrender Value Next 10 John pays $20,000 per monthto XYZ Life years Insurance Company Jan. 1, 2000 John Smith no longerneeds the full $9,000,000 of death benefit and cannot afford the$20,000/month premium payment Details of his insurance policy with XYZLife Insurance company are now as follows Owner John Smith Insured JohnSmith Beneficiary Jane Smith Death $9,000,000 Benefit Premiums$20,000/month for 20 years Cash $1,000,000 Surrender Value Jan. 2, 2000A buyer is willing to purchase the XYZ Life Insurance policy for$2,000,000. Due to the tax implications of receiving a cash payment, andJohn's continued need for death benefit protection, the buyer agrees toprovide John with a new paid up policy as consideration for theassignment of XYZ policy rather than a cash payment. John assigns theXYZ Life Insurance policy to Buyer. Buyer purchases a new guaranteedpaid up policy from ABC Life Insurance Company for a single payment of$2,000,000 No cash consideration is paid to John by Buyer. The detailsof the two life insurance policies are as follows. XYZ Life InsuranceABC Life Insurance Policy Policy Owner Buyer Buyer Insured John SmithJohn Smith Beneficiary Buyer Jane Smith Death $9,000,000 $6,000,000Benefit Premiums $20,000/month for One payment at 20 years purchase of$2,000,000 Cash $1,000,000 $1,500,000 Surrender Value Next 5 Buyercontinues paying $20,000/month to XYZ Life Years Insurance company JohnSmith pays no premiums to either insurance company. Jan. 1, 2005 JohnSmith Dies XYZ Life Insurance Company pays $9,000,000 to Buyer ABC LifeInsurance company pays $6,000,000 to Jane Smith Transaction terminates.

The Owner 205 thus eliminates the tax implications related to a cashpurchase, which is required to be reported as taxable income. Instead,the Owner 205 is the beneficiary of the second insurance policy, forwhich the Buyer 201 pays the premium payments to the Insurance Company207 at step 245. Accordingly, upon the death of the individual whoselife is insured at step 235, the Owner 205 receives the death benefitpayment from Policy 2 where it would not have otherwise had there been alapse or surrender of Policy 1. Also, at Step 260 the Buyer 201 receivesthe death benefit payment from Policy 1, which is greater than the deathbenefit payment of Policy 2.

FIG. 3 illustrates a life settlement transaction 300 according to asecond exemplary embodiment of the invention. The life settlementtransaction is similar to life settlement transaction 200; however, theOwner 305 receives a paid-up insurance policy (Policy 2) 340 instead ofbeing a beneficiary of Policy 2, as provided in FIG. 1. The Owner 305purchases a life insurance policy (Policy 1) from an Insurance Company303 at step 306. Subsequently, the Owner 305 reaches an agreement with aBuyer 301, and the Owner 305 assigns Policy 1 at step 330 to the Buyer301.

In exchange for this assignment, at step 350, the Buyer 301 purchasesPolicy 2 from a Second Insurance Company 307 and pays all of the premiumpayments. At step 340 Policy 2 is issued by the Second Insurance Company307 to be held by Owner 305. Policy 2 can also be purchased fromInsurance Company 303 instead of the Second Insurance Company 307. TheBuyer 301 then makes the premium payments for Policy 1 at step 355 andreceives the death benefits of Policy 1 at step 360 upon the death ofthe insured individual.

One of the benefits that results in transaction 300, like transaction200, is that the Owner 305 eliminates the tax implications from the cashconsideration in this transaction, which cash would be required to bereported as taxable income. Instead, the Owner 305 owns a paid-upinsurance policy, Policy 2. Upon the death of the individual insured,the Buyer 301 receives the death benefit payment from Policy 1, which inmost instances is greater than the death benefit payment of Policy 2.However, the Owner 305, as beneficiary, receives a death benefit fromPolicy 2 where it would not have otherwise if there had been a lapse orsurrender of Policy 1.

Both embodiments 200, 300 as well as the third embodiment discussedbelow can be implemented manually or automatically through a computersystem that is designed to administer and manage the transaction stepsautomatically, as well as calculate the premiums and face value for thesecond policy based on actuarial data. A computer based implementationis described in more detail in FIG. 5.

FIG. 4 illustrates a life settlement transaction 400 according to athird exemplary embodiment of the invention. In this embodiment, thelife settlement transaction is similar to life settlement transaction300; however, an Association or other type of member-based entity 401 isutilized to issue a group life insurance policy covering multipleMembers/Sellers 430.

As such, a Buyer 460 purchases at step 425 an existing life insurancepolicy (Existing Policy) from the owner of the policy, —Member/Seller430, who had previously purchased the Existing Policy at step 408 fromthe Insurance Company 440. The Buyer also has in place, or puts in placeat step 465, an agreement with the Association 401 for the Buyer to makepremium payments, allocate the death benefits that the Buyer receivesfrom the existing Policy, or any other relevant obligations.Accordingly, the Buyer then proceeds to continue to make the premiumpayments at step 450. Subsequently, at step 405, the Member/Seller 430becomes part of Association 401 by paying the required membership fees.

In exchange for the Member's 430 membership fees, at step 435, theMember/Seller 430 receives membership benefits, including the ability toreceive a Life Insurance Group Certificate (Certificate) 437 inconjunction with assigning the Existing Policy to the Buyer 460. TheCertificate represents a paid-up life insurance policy. The paid up lifeinsurance policy is created as follows: at step 415, the Certificate isobtained by the Association 401, which purchases a Life Insurance GroupPolicy from a Second Insurance Company 410. The Association 401 thenmakes premium payments 445 on the policy. Alternatively, the group lifeinsurance policy can be purchased by another suitable entity thatqualifies as a group insurance purchaser with the selected insurancecarrier.

Upon the death of the Member/Seller 430 (or other individual whose lifeis insured), the Buyer 460 receives the death benefit payment from theExisting Policy at step 455, which preferably is greater than the deathbenefit payment on the Certificate 475 received by the Association 401or other suitable entity. However, the Member/Seller 430 or his/herbeneficiary (not shown) receives a death benefit in the form ofMembership Benefits 435 from the Association 401 where it would not haveotherwise due to the lapse or surrender of the Existing Policy.

As previously noted, FIG. 5 illustrates a computer-based system 600 forimplementing the various embodiments of the present invention. It shouldbe understood that each embodiment of the present invention can beimplemented manually as well. Computer system 600 is merely an exemplarysystem, which has the ability to use multiple workstations, servers andpersonal computers as required. In one embodiment, the system 600utilizes a pair of servers 606 and 608 and an Internet connection 604,whereby an Insurance Company 440 can communicate electronically with anAssociation through Internet Connection 610 to conduct a group lifeinsurance policy transaction. Many other configurations, however, can beemployed, and this is only one example of an architecture.

In another example, the server and the data from which the serveroperates can be operated solely by or under the auspices of an insurancecarrier 410 or 440. The server can also be relied upon to calculateappropriate levels of insurance to purchase in exchange for the“purchased” policy and the actuarial factors relevant to both policies.In this example, an individual may become an Insured Member by, forexample, using a personal computer 620 to communicate over the Internet604 to a server 608 maintained by the Association 401. In addition,using a server 606 and an internet connection 630, an Insurance Company410 can communicate with a Buyer 401 or 430 in a single life insurancepolicy transaction. A general purpose computer having a floppy driveand/or CD-ROM, such as a personal computer, laptop or a workstation maybe used by the Insured Member to conduct transactions with theAssociation and/or Insurance Company (not shown). A computer program forinstructing a computer or server to implement the various embodiments ofthe present invention is loaded onto a computer readable medium,workstation, server or personal computer for use by computer-basedsystem 600.

The above description and drawings illustrate embodiments, which achievethe features and advantages of the present invention. However, it is notintended that the present invention be strictly limited to theabove-described and illustrated embodiment. Any modifications, thoughpresently unforeseeable, of the present invention that come within thespirit and scope of the following claims should be considered part ofthe present invention.

It is well known in the art that any of servers, personal computers orlaptop computers (e.g., 604, 606, 608, 612 and 620) can possess at leastcentral processing unit that interprets and executes instructions; inputdevices, such as a keyboard and a mouse, through which data and commandsenter the computer; memory that enables the computer to store programsand data; and output devices, such as printers and display screens, thatshow the results after the computer has processed data. (Source: TheAmerican Heritage® Science Dictionary Copyright, © 2002 by HoughtonMifflin Company).

1. A computer-implemented method for conducting a life settlementtransaction with a policyholder, comprising: receiving by a buyer, inexchange for consideration given to a policyholder, an assignment bysaid policyholder of a first life insurance policy having a first deathbenefit value on a life of an insured, said consideration having anestimated economic value approximately equal to a life settlement valueof said first life insurance policy at the time of the assignment; saidlife settlement value of the first life insurance policy beingdetermined by a computer operated by said buyer and stored, in a memoryof said computer; selecting, on said computer, a second death benefitvalue for a second life insurance policy to be purchased on the life ofsaid insured, said second death benefit value being less than said firstdeath benefit value; and said buyer purchasing the second life insurancepolicy to insure the life of said insured, at least part of saidconsideration being payment on premiums of said second life insurancepolicy, and said second life insurance policy being issued by someoneother than said buyer.
 2. The method of claim 1, wherein said secondlife insurance policy is a paid up life insurance policy.
 3. The methodof claim 1, further comprising issuing, to said policyholder as owner,said second life insurance policy.
 4. The method of claim 1, whereinsaid second life insurance policy is a group insurance policy.
 5. Themethod of claim 1, wherein said second life insurance policy ispurchased from an insurance company different from an insurance companywhich issued said first life insurance policy.
 6. The method of claim 1,wherein said second life insurance policy is purchased from an insurancecompany which also issued said first life insurance policy.
 7. Themethod of claim 1, wherein said step of receiving is performed by acomputer system.
 8. The method of claim 7, wherein said computer systemincludes a component for causing said consideration to be paid to saidpolicyholder by exchanging messages with another computer system over anetwork.
 9. The method of claim 8, wherein said network is an Internet.10. The method of claim 7, wherein said computer system includes acomponent for causing submitting said assignment to the issuer of saidfirst insurance company by exchanging messages with another computersystem over a network.
 11. The method of claim 10, wherein said networkis an Internet.
 12. The method of claim 7, wherein said computer systemincludes a component for purchasing said second life insurance policy byexchanging messages with another computer system over a network.
 13. Themethod of claim 12, wherein said network is an Internet.
 14. The methodof claim 7, wherein said computer system includes a component forestimating an economic value of said first life insurance policy anddetermining at least one combination of said consideration andcharacteristics associated with said second life insurance policy at thetime when said steps of receiving and causing are performed.
 15. Themethod of claim 14, wherein said characteristics include a face valueamount of said second life insurance policy.
 16. The method of claim 14,wherein said characteristics include a cash value amount of said secondlife insurance policy.
 17. The method of claim 14, wherein saidcharacteristic include a premium amount of said second life insurancepolicy.
 18. The method of claim 17, wherein said premium amount is apaid up premium amount.
 19. The method of claim 4, further comprisingsaid buyer agreeing with said group to comply with an obligation to saidgroup.
 20. The method of claim 19, wherein said obligation comprisessaid buyer's agreeing to make premium payments.
 21. The method of claim19, wherein said obligation comprises said buyer's agreeing to allocatedeath benefits existing under said first life insurance policy.
 22. Themethod of claim 4, further comprising: said policyholder joining saidgroup, if not already a member of said group; and said buyer's beingeligible to receive benefits from said group, if not already eligible toreceive benefits from said group.
 23. The method of claim 2, wherein insaid buyer causes said policy holder to receive said second lifeinsurance policy.
 24. The method of claim 2, wherein in saidpolicyholder is named as the beneficiary of the second life insurancepolicy.
 25. The method of claim 2, wherein in a party other than saidpolicyholder and said buyer is named as the beneficiary of the secondlife insurance policy.
 26. The method of claim 2, wherein said buyercauses said second life insurance policy to be paid up over a period oftime.
 27. The method of claim 1, wherein said policyholder is afinancial beneficiary of said second life insurance policy.
 28. Themethod of claim 1, wherein said policyholder is an owner of said secondlife insurance policy.
 29. The method of claim 1, wherein saidpolicyholder is said insured.
 30. The method of claim 1, whereinsubstantially all of said consideration are premium payments.
 31. Themethod of claim 1, wherein at least part of said premium payments arepaid up.
 32. The method of claim 1, wherein substantially all of saidpremium payments are paid up.
 33. A system for facilitating lifesettlement transactions, the system comprising: at least one computer,the at least one computer having at least one processor configured to:receive, for a buyer, in exchange for consideration given to apolicyholder, an assignment by the policyholder of a first lifeinsurance policy having a first death benefit value on a life of aninsured, the consideration having an estimated economic valueapproximately equivalent to a life settlement value of the first lifeinsurance policy at the time of the assignment, the life settlementvalue of the first life insurance policy being determined and stored ina memory of the at least one computer; select a second death benefitvalue for a second life insurance policy to be purchased on the life ofthe insured, the second death benefit value being less than the firstdeath benefit value; and purchase, for the buyer, the second lifeinsurance policy to insure the life of the insured, at least part of theconsideration being payment on premiums of the second life insurancepolicy, and the second life insurance policy being issued by someoneother than the buyer.
 34. The system of claim 33, wherein the secondlife insurance policy is a paid up life insurance policy.
 35. The systemof claim 33, wherein the at least one processor is further configured toissue, to the policyholder as owner, the second life insurance policy.36. The system of claim 33, wherein the second life insurance policy isa group insurance policy.
 37. The system of claim 33, wherein the secondlife insurance policy is purchased from an insurance company differentfrom an insurance company which issued the first life insurance policy.38. The system of claim 33, wherein the second life insurance policy ispurchased from an insurance company which also issued the first lifeinsurance policy.
 39. The system of claim 33, wherein the at least oneprocessor is further configured to cause the consideration to be paid tothe policyholder by exchanging messages with another computer over anetwork.
 40. The system of claim 39, wherein the network is an Internet.41. The system of claim 33, wherein the at least one processor isfurther configured to submit the assignment to the issuer of the firstinsurance company by exchanging messages with another computer over anetwork.
 42. The system of claim 41, wherein the network is an Internet.43. The system of claim 33, wherein the at least one processor isfurther configured to purchase the second life insurance policy byexchanging messages with another computer over a network.
 44. The systemof claim 43, wherein the network is an Internet.
 45. The system of claim33, wherein the at least one processor is further configured to estimatean economic value of the first life insurance policy and determine atleast one combination of the consideration and characteristicsassociated with the second life insurance policy.
 46. The system ofclaim 45, wherein the characteristics include a face value amount of thesecond life insurance policy.
 47. The system of claim 45, wherein thecharacteristics include a cash value amount of the second life insurancepolicy.
 48. The system of claim 45, wherein the characteristic include apremium amount of the second life insurance policy.
 49. The system ofclaim 48, wherein the premium amount is a paid up premium amount. 50.The system of claim 36, wherein the at least one processor is furtherconfigured to agree with the group to comply with an obligation to thegroup.
 51. The system of claim 50, wherein the obligation comprises thebuyer's agreeing to make premium payments.
 52. The system of claim 50,wherein the obligation comprises the buyer's agreeing to allocate deathbenefits existing under the first life insurance policy.
 53. The systemof claim 36, wherein the at least one processor is further configuredto: admit the policyholder to the group, if not already a member of thegroup; and admit the buyer to receive benefits from the group, if notalready eligible to receive benefits from the group.
 54. The system ofclaim 34, wherein in the buyer causes the policy holder to receive thesecond life insurance policy.
 55. The system of claim 34, wherein in thepolicyholder is named as the beneficiary of the second life insurancepolicy.
 56. The system of claim 34, wherein a party other than thepolicyholder and the buyer is named as the beneficiary of the secondlife insurance policy.
 57. The system of claim 34, wherein the secondlife insurance policy is paid up over a period of time.
 58. The systemof claim 33, wherein the policyholder is an owner of the second lifeinsurance policy.
 59. The system of claim 33, wherein the policyholderis the insured.
 60. The system of claim 33, wherein substantially all ofthe consideration are premium payments.
 61. The system of claim 33,wherein at least part of the premium payments are paid up.